Middle East news org aims to expand U.S. presence via $500 million pact

In a bold move to expand its U.S. presence, Middle East news org Al Jazeera has acquired cabler Current TV in a deal valued at about $500 million.

Doha, Qatar-based Al Jazeera intends to rebrand the cabler as Al Jazeera America, emphasizing international news for U.S. auds. Sale was unveiled Wednesday by Current TV chiefs Al Gore and Joel Hyatt, who put the news and public affairs-centric cabler on the block in October.

At present, Current TV is available in just under 60 million homes. But on the heels of the sale news, Time Warner Cable, which had already identified Current as one of a number of channels it intended to drop because of low ratings, said in a statement that it had “terminated” its carriage agreement with Current and was “removing the service as quickly as possible.”

Al Jazeera may face similar moves by other providers, as carriage pacts often allow distribs to drop a channel if it undergoes a significant makeover.

Al Jazeera, which is owned by the state of Qatar but operates as an independent broadcaster, remains a politically controversial outfit for some in the U.S., given its association in the mind of many viewers with coverage of terrorist actions against Western targets. But since its bow in 1999 as a 24-hour news outfit, Al Jazeera has gained credibility as a news org and is widely distribbed in major foreign markets, particularly the U.K. Nonetheless, it has had a hard time securing U.S. distribution for the Al Jazeera English offshoot channel that launched in 2006.

Some of Al Jazeera’s news and docu programming airs in the U.S. on low-profile channels, and it is made available by satcaster Dish Network as part of an Arab-themed channel package. It’s expected that Al Jazeera will focus its U.S. efforts going forward on the rebranded Al Jazeera America and allow Al Jazeera English to remain a going concern in other international markets.

Former Vice President Gore and his partner Hyatt each held 20% stakes in Current TV, according to a source. Comcast also held a 10% stake, and others with a piece of Current include Ron Burkle’s Yucaipa Companies and Blum Capital. News of Current’s deal with Al Jazeera was first reported by the New York Times.

“We are proud and pleased that Al Jazeera, the award-winning international news organization, has bought Current TV,” Gore and Hyatt said in a statement. “Current Media was built based on a few key goals: To give voice to those who are not typically heard; to speak truth to power; to provide independent and diverse points of view; and to tell the stories that no one else is telling. Al Jazeera, like Current, believes that facts and truth lead to a better understanding of the world around us.”

Deal will effectively dissolve Current TV as a cable network in as little as three months. Al Jazeera intends to establish a New York-based production hub to feed Al Jazeera America and its other channels. Current also has production facilities in Los Angeles, Washington, D.C., San Francisco, Miami and Chicago.

From the start, Current struggled with low ratings and a low profile. The channel was launched in 2005 after Gore and Hyatt bought the little-seen cabler NewsWorld Intl. from Vivendi Universal. It initially focused on low-end docu fare produced in-house, but gradually its horizons expanded to more traditional news and public affairs programming. Current made a bid to join the cable news big leagues by recruiting Keith Olbermann in 2011 to host a nightly program, but relations between the famously mercurial host and the cabler quickly soured and Olbermann left amid lawsuits and recriminations last March.

Current’s on-air roster includes shows hosted by Eliot Spitzer, John Fugelsang, Joy Behar, Cenk Uyger and California Lt. Gov. Gavin Newsom.

In a memo to staffers, Hyatt said he and Gore would serve as advisers to Al Jazeera America and aimed to help “build an important news network.” Hyatt emphasized Al Jazeera’s news credentials, its broad reach overseas, with 80 bureaus and distribution in more than 260 million homes, and Qatar’s status as a close ally of the United States.

There was no immediate word about the fate of existing Current staffers. Hyatt said in his meme he would facilitate meetings between Al Jazeera execs and Current employees in the coming days.

Raine Group worked with Current TV on the sale to Al Jazeera.

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